Unovest first unveiled its recommended mutual fund portfolio on Oct 1, 2016. The intent was to enable investors to get a ready portfolio of mutual funds that they can consider investing in in line with risk profile and time horizon.
For those, who had no background in mutual funds or are first time investors, these portfolios can be used as is, which several of you did too.
It has been one and a half years since then. Our conviction has stood by us during this time as we hardly made any change to these portfolios. (We had to remove one fund that too because it stopped taking new investments.)
As you are aware, recently several MF schemes have undergone changes because of the SEBI circular on rationalisation and categorisation. Even with these changes, most of our recommended funds have not had any impact.
In fact, there is only a token name change for some of the schemes included in the portfolios. A couple of them chose a more relevant category based on SEBI guidelines.
However, over this time, we also have observed the portfolios as well as the individual schemes.
We realised that we can bring in some changes to make the portfolios more focused and truly reflect their character for their respective risk profile and time horizon.
And so we made the changes. We are happy to present to you our concise list of recommended mutual fund portfolios.
What mutual fund portfolio changes are we talking about?
Before we get to the actual changes, here is the thought process that has gone behind the changes.
- No Pure Large cap schemes – Pure large cap schemes have found it difficult to deliver value vis-a-vis their benchmark. We believe it will be become increasingly more difficult for them. Hence, we don’t have any pure large cap category funds in the portfolios. If you still want a pure large cap fund as a part of your portfolio, take in an index fund / ETF.
- Portfolio categories – This is probably the biggest change. We now have merged the time horizons of Medium Term of 5 years+ and Long Term of 10 years+ into a Medium to Long Term Horizon of 5 years +. As a result, there are only two key portfolio categories* – Wealth Preserver and Wealth Builder. The third category, Cash Convert, is more like an alternative to your bank account. This makes it simple to pick your funds based on your risk profile.
- No. of schemes – We have reduced the no. of schemes in most of the portfolios and made them more focused. This is also a commitment towards our chosen fund schemes.
- Aggressive – Yes, we have made the aggressive portfolio more aggressive now. Having said that, aggressive portfolios are meant for a very small set of investors. Most investors are good with moderate risk portfolios.
- Pure Equity tilt – The Wealth Builder portfolios now include pure equity funds only. If you want to invest towards your asset allocation, you can invest in a mix of Wealth Preserver and the Wealth Builder funds.
- Tax saving funds – One of the long pending requests was the addition of tax saving fund recommendations. They are finally available.
- Updated description – For all the preserver and builder funds, there is updated description along with a quick summary of why a particular fund has found its place in the portfolio.
*In the interest of simplicity, the wealth enhancer category is now done away with.
What remains unchanged in these recommended mutual fund portfolios?
- Each of the portfolios is unique.
- Each of the chosen schemes within the portfolio is likely the best implemented strategy of that fund house.
- Thus, each fund scheme adds something unique to the portfolio. This prevents any significant overlap in the portfolio holdings and brings adequate diversification.
If you have been following the blog posts on Unovest, you can probably even guess the changes.
So, where do you see the mutual fund portfolio?
The Do it Yourself (DIY) and PLUS plan premium subscribers can access the portfolios now.
In your Unovest account login, go to MF portfolios under Premium section.
For the PLUS plan subscribers, there is a bonus. Over the next couple of months, we will exclusively share with you detailed analysis of fund schemes and the portfolios.
We will also share with you the entire Unovest recommended list of funds. While our portfolios have a constraint of including only a few funds, it does not mean that there are no other good funds. On an ongoing basis, we will share our list of funds and updates on the recommended portfolios.
Keep a watch on your inbox. And if you have not subscribed yet, do it now. There are other benefits too.
So, here’s wishing you happy investing.